Rarely do politicians display more nerve than when they complain about people “gaming the system.” Why? Because these very same complaining politicians are the ones who designed the system and refuse to change it.
So it was really rich last week when President Obama once again railed against corporations who “game the system” by undertaking corporate inversions, which means that they acquire an overseas company and subsequently set up their headquarters in the country of the acquired company so they don’t have to pay the U.S.’s ridiculous 35 percent corporate tax on revenue earned overseas.
Obama actually tried to position himself as a friend of some businesses, claiming that he was coming to the defense of those who “play by the rules” by attacking those who “game the system” through inversions.
I don’t know how to break this to the president, but the companies doing inversions are the ones playing by the rules. And Democrats are the ones who refuse to change the rules! In fact,
as we told you on Friday, Democrats thought those rules were perfectly fine for Delphi back in 2009, even though they’re sending the IRS after Delphi now because their own past behavior has now become a political problem.
It only makes sense for any U.S. company to do whatever is possible to minimize costs, and I don’t know why Democrats think taxes should be a cost corporations relish paying. Costs are costs. Just because Obama, Reid and Pelosi desperately want your money doesn’t mean you should love the idea of handing it over to them.
But that’s the narrative they’re trying to establish, even going so far as to suggest that corporations are “unpatriotic” if they “renounce their citizenship.” (There is no such thing as citizenship for corporations, which is not an argument for taking away their right to free speech, although liberals will try to say it is.)
If Democrats really thought corporate inversions were a major problem, they could easily solve it. All they would have to do is adopt a new tax code that doesn’t tax corporations at an insane 35 percent, and doesn’t tax them at all for revenue earned overseas. No other major industrial nation does that, and that’s why American corporations are looking to establish headquarters elsewhere!
But can I tell you a secret? Democrats don’t want to solve this problem, and probably don’t even really think it is a problem. For them, it’s just the latest thing for them to talk about. It’s just like Big Bird, the “war on women” or whatever other narrative allows them to win the news cycle. They can’t talk about their own governing record because it’s horrendous, so they talk about nonsense like this.
And they’re certainly not going to change their own rules. The rules are designed to allow the system to be gamed. That’s the whole idea. They just don’t like it when other people game the system better than they do.
